ECONOMIC UPDATE: Currency – The Battle for Naira Stability

ECONOMIC UPDATE: Currency – The Battle for Naira Stability

In our H1 18 Nigeria Strategy Report, we projected a blow in FX outflows that will impulse the CBN to step up its intervention across FX markets. Our projection was based on the confluence of policy normalization in developed markets, flight to safety across EMs, lower domestic interest rate environment, and political risk in the domestic clime. True to our prognosis, average monthly FX outflows rose 15.4% over H1 2018 to $3.6 billion (forecast; $3.3 billion), which prompted an accelerated pace of intervention by the CBN.

For context, CBN sales expanded at the IEW1 and interbank markets over H1 18 – IEW (+122% to $1.96 billion), BDC (+83% to $2.89 billion) and Interbank sales (+56% to $11.4 billion) to drive overall intervention to $16.3 billion (+66.5%). Consequently, the NAFEX2 and BDC rates remained relatively stable over H1 18, closing the period at N360.5/$1 and N362.3/$1 accordingly.

Coalescing our adjusted CBN outflows and inflows, we estimate monthly average reserve drawdown of $310 million (average accretion of $1.3 billion in H1 18) which summed up to $1.9 billion over H2 18 (vs. $8.0 billion accretion in H1 18) – notwithstanding Eurobond issuance – which should dwarf any significant accretion in the foreign reserve to $45.7 billion. Consequently, we expect the apex bank to put its full ammunition to use to keep the Naira at current bands, which would maintain stability in the short term to keep the interbank at N361/$ for the rest of 2018.

Further down, the distortion of the free interplay of demand and supply at the IEW with the lag expected from CBN intervention – amidst pressure at other windows as in May 18 – would drive short-term volatility in rates and an eventual adjustment to our fundamental driven purchasing power parity estimate of between N391.17/$ to N402.48/$ (7-10% down-leg from current NAFEX rate of N361.00/$ at the end of June 2018).

CBN fires up as Hot Money lose steam 

In our H1 18 Nigeria Strategy Report, we projected a blow in FX outflows that will impulse the CBN to step up its intervention across FX markets. Our projection was based on the confluence of policy normalisation in developed markets, flight to safety across EMs, lower domestic interest rate environment, and political risk in the domestic clime. True to our prognosis, average monthly FX outflows rose 15.4% over H1 2018 to $3.6 billion (forecast; $3.3 billion), which prompted an accelerated pace of intervention by the CBN.

For context, CBN sales expanded at the IEW3 and interbank markets over H1 18 – IEW (+122% to $1.96 billion), BDC (+83% to $2.89 billion) and Interbank sales (+56% to $11.4 billion) to drive overall intervention to $16.3 billion (+66.5%). That said, while we had expected the accelerated sales to drive a drawdown in external reserve, the combination of strong foreign flows in the first quarter, which provided room for the CBN to shore up its reserve4, combined with Eurobond issuance earlier in February, and improved oil inflows (+20.6% to $9.0 billion) triggered robust net flows with $7.4 billion accretion striding the FX reserve to $47.8 billion at the end of H1 18. Consequently, the NAFEX5 and BDC rates remained relatively stable over H1 18, closing the period at N360.5/$1 and N362.3/$1 accordingly.

 

VIEW FULL REPORT HERE

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Source: Articles

4 Money lessons this holiday

4 Money lessons this holiday

It’s the long holiday. Your children will be away from school and with you at home for at least eight weeks. Looking forward to building memories together? We bet you are. This holiday is, however, a perfect time to ingrain lifelong money lessons in your children. You can teach them to value money. Let them understand that mum and dad work for money and that most of the things they enjoy were bought with money and should be handled with care.

The practical steps below will help you inculcate these lessons.

 

  1. Kickstart a savings culture

Children get loads of gifts, many times monetary, from their parents and other family members. Teach your children to always save a part of any amount they are given. If they are at the age where they get stipends, teach them to save a fraction of their allowance. You can begin with a visible piggy bank where they physically drop the money and progress to a young savers account or Money Market Fund as they get older. Share their account balances with them periodically so that they see their money growing.

  1. Let them set savings goals

Saving is significantly easier when you are saving towards a goal. Teach them the value of financial goals. Let them identify something they really want. Calculate the cost and how long it will take to save for it if they save an amount from their daily allowance. Keep a record of the savings and track. Remind them periodically- e.g. five weeks to your new Play Station game. When the time is done, and the money accumulated, open the safe and buy them the game. They will feel very fulfilled and value the game.

  1. Allow them to earn money

As they mature, it’s important to teach them the importance of labour and its connection with resources and fine living. You could give them specialized tasks that are not typically among their chores and pay them for it. If there are old enough to work during the holidays, encourage them to get safe holiday jobs.

  1. Celebrate their milestones

Nothing propels progress like encouragement and reward. Celebrate their saving milestones with lavish praise and treats. If your child saves consistently for a whole school term, for instance, you could take that child to the movies as a reward for consistency. The child who saves for a PS game can also get ice-cream in addition. These rewards communicate that doing the right thing is always beneficial eventually.

 

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The stage is set for ARM ENGAGE (III)

The stage is set for ARM ENGAGE (III)

The date is fixed, and stage set for the third instalment of the ARM ENGAGE event hosted by ARM Pension. On the 26th of July 2018, the brand will open the doors of Terra Kulture to NYSC and fresh graduates for an educative and fun session themed “The Millennial Professional”.

This event aims to inspire and prepare the younger generation for the professional life after university and youth service. To achieve this, personalities like Zainab Balogun, Emma Oh My God and Iyinoluwa Aboyeji have been invited to speak on topics that touch every stage of the target audiences’ professional life and growth.

The most recent instalment of the event which held in November 2017 with the theme “The 21st-century entrepreneur” had speakers like Bolanle Austin-Peters, Adebola Williams, Bosun Tijani and Cobhams Asuquo. Each of these speakers held the crowd spell-bound with topics that ranged from Embracing the Glass ceiling, to Find your rhythm.

With over 500 persons in attendance, the event achieved its aim of bringing a crop of young individuals under one roof to prepare them to excel at being 21st-century entrepreneurs.

The Managing Director of ARM Pension Mr Wale Odutola while appreciating the reach and impact of the previous ARM ENGAGE events, is optimistic that this edition slated for July 2018 will be a big boost to the preparatory efforts of the next generation of industry leaders.

 

Register here to attend ARM ENGAGE (III)

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Maximizing funds this holiday

Maximizing funds this holiday

Holiday means the children will be home with you. But it also means another session is approaching and school fees are around the corner. With holiday treats and expenses piling up, there is a need to conserve resources as much as possible. Is there a way to moderate holiday expenses and still give your children a good time? Consider the following tips.

 

Buy in bulk: you know the biscuits and drinks your children enjoy, make the difficult choice of buying a carton. It will eventually make more financial sense.

 

Cut down on the variety: Resist the temptation to buy the food variant each child prefers. Rather buy the one all your children enjoy.

 

Choose summer school carefully: Look for an option that delivers value without blowing your budget. Finding a school close to your house or office could also help you save on transportation expenses.

 

Invite trusted family members: If you have retired parents or available siblings you trust, invite them to stay with you over the holidays. Keep communication lines open and teach them how to care for your children.  It will help you save on nannies.

 

Schedule your leave to match their holiday: scheduling your time-off-work to fall during your children’s holiday will ensure you are there to take care of them yourself. Apart from cutting out nanny costs, this will also enable you to manage your resources to last all through the holidays.

Help your children understand that the good things in life come at a cost and waste must be avoided. Teach them the art of saving this holiday.

 

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What to do if your child performs poorly at school

What to do if your child performs poorly at school

Every parent expects their child to come home with a good result after a school term. A good result assures them that their enormous investment in the child’s education is valued and likely to birth returns. However, this is not always the case. Parents sometimes must deal with their children’s unsatisfactory results. What is the best way to handle such occurrences? The tips below should help;

  1. Approach the situation with calm

Naturally, your first reaction would be to express your disappointment in the child. This might however not be the most productive thing to do. It may help not to respond immediately but give yourself time to relax and approach the situation from a place of calm. It will help you think things through.

  1. Focus on the positives

It is unlikely that the child would have failed at all his/her subjects. Consider the subjects with more encouraging grades and the comments from the teachers. It could be an indication of the child’s strengths and interests.

  1. Find out what went wrong

Not every bad result is a consequence of poor preparation, the child could have had challenges understanding the teacher, be finding it difficult to adapt to a new school or struggling with peer pressure. At other times, laziness and poor preparation are the culprits. Whichever way, identifying the problem area will help you find a fitting solution.

  1. Develop a practical plan

There is no doubt that the child needs help. Together, work out a practical plan that would help the child do better next term. Could be earlier nights to ensure alertness in class, a reading plan through the school term, a tutor for extra classes, a change of academic direction or even a change of school or living environment.

  1. Keep the communication line open

Do not wait till the next result season to discuss the child’s progress. Periodically check in with the child and tutors to ensure your plan is working. Follow up on their continous assesment tests and assure of your willingness to listen to their challenges and help them overcome it.

 

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Expecting the email?

Expecting the email?

Have you received the email yet? The one from your child’s school reminding you that you need to pay a certain percentage of the fees on or before the school term resumes. Typically, it is accompanied by account details/bank teller and a comprehensive bill featuring items/activities you are convinced your child does not need but for which you have to pay.

As you go through the list- tuition, books, school uniforms, school bus, lunch, music classes, elocution training, inter house sports, swimming lessons, field trip– your stomach does a flip flop, your countenance changing as you take a mental trip into all your accounts. What miracle will I perform over the next three weeks? You wonder. You remember the client who is yet to pay and wish you had invested the proceeds from that contribution you did two months ago. God help you if you have more than one child or if any of your children is crossing into secondary school or university.

That is scenario one. But there is scenario two.

You receive the email, go through the list, check the final figure, retrieve the bank details and transfer the money to the school’s account without sweating profusely, practicing your addition and subtraction skills or worrying about the deadline and where money will come from. Even when you have more than one child and your children are crossing into secondary school or university, you are not fazed.

No, you don’t necessarily earn more than you did in scenario one, you have simply learnt to plan and save ahead. You started an education plan for your daughter when she was in Primary one. Now that she is crossing into secondary school, you call your account manager at ARM Life, redeem your lump sum. It is enough to take care of her secondary school fees and everything she needs for school. When you buy insurance, you are not paying for risk, you are paying for peace of mind.

So are you a scenario one guy? No problem, now is always the best time to start doing thigs right. Get an education plan today or start a savings plan. As your child grows, the cost of education will likely increase, your reserve should increase as well.

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30 and ready to Will it

30 and ready to Will it

I didn’t think I would come this far so soon. 10 years ago, I was just a starry-eyed girl, fresh from university looking for her place in the world. What is now my chain of stores began like child’s play. My first job was as a front desk executive at a consulting firm. Many of the well paid big girls in the office could not resist complementing my dress sense. They found it amazing that I could pull of magazine cover type of looks on my entry level salary. I knew all the hot spots for good clothes, the will to go the distance, good negotiation skills and an eye for combinations that work well. I soon became a personal shopper for most of the ladies in the office.

When I could no longer cope with the demand, I resigned and faced the business head long. Consulting for corporate fashion became my thing and I was soon a popular name at many organisations. Along the line, I picked up the habit of attaching little favours for my clients, alongside their purchases. It made a massive difference, the referrals poured in and soon, I was ordering fabric from Bangladesh and India, sending original designs to China and shipping in clothes in my label. The first store was a huge success, two stores quickly followed and now I have over 30 stores stocked with unique designs for the corporate woman, bearing my seal.

Of course, making and selling clothes is not all I have done in the past 10 years. I found love along the way and started a family not long after. Seemingly, the only thing not working in life is my relationship with my in-laws. They just cannot stand the sight of me. Traditional in their outlook and set in their ways, they cannot understand a wife that jets all over the world opening stores and gracing runways. They think their banker son deserves to come home to sumptuous food made by his wife every day. They think I am not prioritizing our two kids and that my wanderlust is the reason we do not yet have a son.

If only they knew that the glory days of bankers are over. That their son is not yet highly placed enough to earn the kind of money that can fund our current lifestyle. That the houses and cars are products of my country hopping. That the fat allowance they get every month often comes from me. Already I can hear the whispers, the prodding, he needs to get a younger wife that will stay at home to take care of him and bare him sons. At first, I was certain he would not budge, but his recent incessant complaints about my schedule is betraying the fact that he is beginning to succumb to their prodding. I would not be shocked if I return home one day to meet a yellow sisi in my kitchen, wearing the madam glow and feasting on my hard work. That’s why I could not wait, I had to take steps to secure my children and my assets.

First, I put my children’s education in a Trust, that way they will still get to attend the best schools, regardless of what happens. I am also considering estate planning. It’s time to put my house in order. Not many people think about getting a Will in their 30s but I have to. Given my situation, I can’t take chances, it’s time to Will it. I hope I live a long happy life, but if I don’t or if something happens to my marriage, I want it to be clear who owns what and who gets what. I also want my daughters to know they mean the world to me and they are the reason I work so hard.

I am not leaving this to chance, it’s time to be 100% sure.

Securing your assets for the ones you love is now really easy, sign up on our Easy Will portal to get a secure and valid Will online.

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5 ways to enjoy the Sallah break

5 ways to enjoy the Sallah break

Nothing makes the average Nigerian happier than a weekend that cascades into a 2-day public holiday.

For many, this is the perfect time to catch up on much-needed sleep and do some things they’ve been putting off due to lack of time. Not to talk of the inner satisfaction of not having to wake up early and endure morning rush-hour traffic.

But how do you make the most of the break?

Here are ideas you can use just to make sure you have an amazing 4-day break;

 

Give yourself some love

When was the last time you treated yourself to a good time? Don’t allow work and the need to please everyone else make you forget that even you are human. Smother yourself with some self-love this break. Go get a massage, sleep in, and get the rest that will get you hyper when you resume for work the following week. Your body will thank you for it.

 

Spend time with family

Work and busy schedules rob most of us of the time with family. This is the perfect time to catch up with family. You can either take your family somewhere fun or keep it indoors seeing movies or enjoying the World Cup over some home-made popcorn or barbecue. If you have kids, this time can also help you bond better if you’ve not really spent time with them.

 

Tick off certain tasks

It’s a break but it must not be all fun and games. Now might be appropriate to do a mental check of things you’ve put off for too long – like applying for a course, attending a webinar, rejigging your monthly budget, or setting up a direct debit to your various investment and insurance accounts. Doing all these before the resumption of life’s busyness helps you keep your mental and financial house in order.

 

Get away

Maybe you have friends or family who live in another state or who you haven’t seen in a while, 4 days is ample time to do an interstate travel to visit them or getaway to some cozy place in town to catch up. Not only will they appreciate your effort, your relationship will also be strengthened.

 

Events and more events

Whether it’s a stage play, or comedy show (these events always come up), find one that catches your fancy and relax to the entertainment they offer. You may not have the time for such in the coming weeks, so enjoy it while you can.

 

The idea behind all this is to enjoy yourself for a few days and get back to work fully energized to meet your goals.

Enjoy your break!

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Ask Shade: He Left Everything to His children From a Previous Marriage! How Do I Secure My Child’s Future?

Ask Shade: He Left Everything to His children From a Previous Marriage! How Do I Secure My Child’s Future?

Dear Shade,

I’m in my early 30s engaged to a widower in his 50s. We plan to get married in a few months and I‘m already pregnant. While cleaning his study last week, I stumbled on something that looks like his Will and it seems like he already willed everything to the three children from his previous marriage. Since then I’ve been worried about my unborn children. What would be their fate? What if something suddenly happened to their father, will they have anything from him? How can I be sure what I found is really his valid Will? Since I’m already carrying his child, I am contemplating asking him to write another Will. The document I found dated back to 2009, what of assets he has acquired after he wrote this Will? Please advise me, how can I secure my children’s future?

Fikayo, Lagos

***
Hello Fikayo,

I completely understand and empathize with your situation as it could be quite a challenge bringing up the issue of Wills with your fiancé considering the fact that you are not yet married to him. It is only natural that you are concerned about the security of your children’s future, given the prevailing circumstance. Your concerns are valid and thinking about an update of your fiancé’s estate plan is the way to go.

The details you provided about the document you stumbled upon are hardly enough for me to ascertain if it is indeed your fiancé’s Will. However, even if it is not his Will, it is likely an indication that a Will exists, and your fiancé is knowledgeable and intentional about estate planning. I think you should find a little relief in this fact, it gives you a good pedestal to start the conversation about an amendment and all that.

It should interest you to note that the Wills Law of Lagos State makes it necessary for your fiancé to make provisions for all his dependents in a Will which would include your unborn child and subsequent children. In the event that he refuses to make the appropriate provision, he must state a reason or reasons for his refusal. You should also be aware that since you are not yet married to him you do not outrightly become his dependent, the baby notwithstanding.

If all else is in place, you should focus on getting married as the marriage will confer on you rights as a dependent and give you the needed standing to discuss his succession plan. Once married statutorily-that is marriage done through a marriage registry, all prior Wills written by your husband (including his 2009 Will) would become invalid according to the provisions of the Wills Law. He would therefore need to rewrite his Will based on the statutory marriage with you.

Should there be any fatality to your husband after your marriage without him rewriting his Will, you would be entitled to all his personal belongings (items like clothes, jewelry, watches etc) and one-third of his estate according the Administration of Estate Law while his children would be entitled to two-thirds of the estate. These unspecific distributions could however be likely cause of dispute amongst family members due to valuation and sharing issues relating to the Assets. Should the unfortunate occur before your wedding, the child should still be considered his dependent.

I understand that the subject of Wills may appear to be a bit emotional, but I would recommend that you subtly encourage your fiancé upon marriage to re-write his Will so that the intestacy rules are prevented and the beneficiaries’ gifts are clearly stated to reduce dispute amongst family members. You should also consider writing your Will if you do not have one.

Thanks to everyone who has reached out to me with their concerns. If you would like to have your question featured, please email your question to [email protected]. ARM has a new and easy way for people to get started on their last will and testament. The Easy Will portal  is designed to take the stress off getting a Will. In a few clicks, interested people can now easily get a valid and secure Will online. Have a look here.

Warm regards,

Shade

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World cup ready? Let’s confirm

World cup ready? Let’s confirm

So, it’s 8 days to the world cup, how ready are you?

We compiled a list of the five most essential things you need to have a fabulous time this world cup season. Check them out!

  • Evenings free; This is not the time to work long hours or have weekend duty. What to do? Report for work earlier than usual and maximize your mornings. No faffing or dulling, get to work in good time, do your work well so that you can leave on the dot of the closing time. If your boss is also interested in football, it should be an easy ride. If not, well, all you can do is try.

 

  • Data & Tv subscription; Don’t be that guy that waits till the morning after to glean match gist from his colleagues. Renew your cable subscription and keep your phone data-full. If you live really far from work, you might not need to subscribe for cable TV, what you can do is locate a decent& safe viewing center around your office.

 

  • Sure guys; There is nothing as disappointing as watching a great match all by yourself with no one to analyze the moves or celebrate the moments with. This is the time to connect with two or three of your favourite football buddies. Be open to making new buddies too, nothing unites like good football.

 

  • Settle Bae; Bae can stress you this season with constant complaints of how you are colonizing the TV remote and no longer have time for her. Perhaps you should buy her the hot new Nigeria jersey, and explain the match schedule to her- more like take a leave of absence. You can also buy her that book she’s been talking about or help her subscribe to a movie streaming application. P.S Think dialogue and compromise.

 

  • Money sense; If you look closely, you’ll observe that all the things listed above are going to cost you money. Yes, the world cup is likely to increase your expenditure. That’s why you need to wise up. Ensure you invest right before the spending spree starts. All you need to do is download the PayDay Investor app, follow the few and easy steps to complete your registration and start investing. That way you will have money kept aside, safe from the pressures of world cup spending and won’ t have a reason to sing ‘had I known’ later.

Finding it difficult to complete your registration? Please email [email protected] for prompt assistance.

We wish you a season of fantastic football.

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